Item - 2025.GG26.25

The General Government Committee recommend that:

1. City Council authorize the Chief Technology Officer to negotiate and enter into an agreement with IBM Canada Ltd for the Enterprise Work Management Solution cloud migration and Toronto Water rollout components and for the Corporate Real Estate Management component, commencing from January 1, 2026 for a term of two (2) years with options to extend the Contract by one (1) additional one (1) year period in the value of $34,300,219 net of all taxes and applicable charges ($34,903,904 net of Harmonized Sales Tax Recoveries), subject to terms and conditions acceptable to the Chief Technology Officer.

The purpose of this report is to request City Council authority to enter into a non-competitive contract with IBM Canada Ltd. (IBM), a Canadian business subsidiary, for IBM Maximo Application Suite (MAS) Software-as-a-Service subscriptions and support in the amount of $34,300,219 net of all applicable taxes and charges ($34,903,904 net of Harmonized Sales Tax recoveries Recoveries) commencing from January 1, 2026 for a term of two (2) years with option to extend the Contract by one (1) additional one (1) year period.

The Enterprise Work Management Solution Program is modernizing the City's work management systems by replacing outdated, siloed systems with a single, unified platform using IBM Maximo technology, which provides an integrated solution that streamlines work planning, asset management, and service delivery. At the time of writing this report, over 1500 staff across six divisions are supported by the on-premises IBM Maximo technology as part of Enterprise Work Management Solution. This report supports the transition of these divisions from the on-premises, end-of-life Maximo platform to the upgraded, cloud-based solution, and rollout to Toronto Water as a net new division using the solution.

Following an unsuccessful Request for Proposal in 2025 to competitively procure IBM MAS for the Enterprise Work Management Solution cloud migration and Toronto Water rollout through a third-party reseller of IBM products, the City is recommending a non-competitive procurement directly with IBM. The City has confirmed that entering into a direct agreement with IBM provides the greatest benefit and least risk for the City.

Similarly, Corporate Real Estate Management needs to replace its legacy, end-of-life systems with IBM Maximo Application Suite modules, including Maximo Real Estate and Facilities, to ensure operational continuity and compliance as current systems reach end of support. This proposed non-competitive procurement also includes the software licensing and cloud environment required to enable Corporate Real Estate Management’s unified real estate information platform, which was not originally included in the Request for Proposal. This will enable the City to retire end-of-life products and move toward a unified, cloud-based approach for managing critical real estate assets across the City. Adding the volume of Corporate Real Estate Management to this Non-Competitive Procurement helps the City negotiate a lower total cost of ownership and licensing allocation flexibility in addition to other commercial benefits and protections.

This approach will still allow the City to access competitive pricing by avoiding reseller markup and negotiating directly with IBM for flexible licensing terms and enhanced service terms unavailable through third-party resellers. It enables the City to continue to satisfy the Enterprise Work Management Solution Program timelines and objectives, meet Toronto Water's project critical path, and satisfy Auditor General recommendations.

Prior to expiry of the proposed agreement with IBM Canada Ltd., the City will reassess competitive procurement options to ensure continued value for money, operational efficiency, and alignment with evolving industry standards.

Non-competitive procurements may be undertaken where both the proposed procurement and supplier can be justified in good faith based on an exception set out in Toronto Municipal Code Chapter 195, Procurement. This non-competitive procurement  will be proceeding under the exception code Section 195-7.1(F) for the Enterprise Work Management Solution cloud migration and Toronto Water rollout components and Section 195-7.1(P) for the Corporate Real Estate Management component, the City has determined in good faith that both the proposed procurement and the selected supplier, along with the terms and conditions of the contract are beneficial to the City (Toronto Municipal Code, Chapter 195, Procurement, Section 7.1K.).

City Council approval is required in accordance with Municipal Code Chapter 195, Purchasing, where the current request exceeds the Chief Procurement Officer’s authority of the cumulative five-year commitment limit for each vendor under Article 7, Section 195-7.3(D) of the Purchasing By-law or exceeds the threshold of $500,000 net of Harmonized Sales Tax allowed under staff authority as per the Toronto Municipal Code, Chapter 71, Financial Control, Section 71-11(A).